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Federal Mediation Privilege—How Far Does It Go?

Sheila J Carpenter


  • Acqis, LLC v. EMC Corp. established a federal common law mediation privilege, which protects certain documents related to settlement discussions.
  • The creation of a mediation privilege addresses the need for confidentiality and trust in mediation, serves public ends by promoting expeditious and cost-effective resolution of litigation, and is consistent with state policies.
  • The scope of the federal mediation privilege is limited to communications directly involving the mediator or made with the intent to present them to the mediator.
  • Post-mediation settlement negotiations are not protected and subject to Rule 408 limitations on admissibility.
Federal Mediation Privilege—How Far Does It Go?

Acqis, LLC v. EMC Corp., No. 14-cv-13560 (D. Mass. June 29, 2017) (Burroughs, J.), is the most recent case adopting a federal common law mediation privilege and a convenient starting point for attorneys faced with the issue of what documents are covered by such a privilege. In Acqis, a patent case, the disputed documents related to mediations that took place in other lawsuits in other courts; they involved plaintiff Acqis, LLC but not defendant EMC Corporation. EMC sought documents related to these settlement discussions and Acqis asserted that they were covered by a mediation privilege. EMC agreed that documents created for use in the mediations themselves were privileged. The mediations in question apparently failed but there were settlement discussions after the mediations were terminated. Documents relating to the later discussions were the center of the dispute.

Such disputes implicate two important Federal Rules of evidence. Federal Rule of Evidence 408 states:

Rule 408. Compromise Offers and Negotiations

(a) Prohibited Uses. Evidence of the following is not admissible—on behalf of any party—either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering — or accepting, promising to accept, or offering to accept—a valuable consideration in compromising or attempting to compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the claim—except when offered in a criminal case and when the negotiations related to a claim by a public office in the exercise of its regulatory, investigative, or enforcement authority.

(b) Exceptions. The court may admit this evidence for another purpose, such as proving a witness's bias or prejudice, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.

and Federal Rule of Evidence 501 states:

Rule 501. Privilege in General

The common law—as interpreted by United States courts in the light of reason and experience—governs a claim of privilege unless any of the following provides otherwise:

  • the United States Constitution;
  • a federal statute; or
  • rules prescribed by the Supreme Court.

But in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.

Why Create a Mediation Privilege?

The exceptions to the protections of Rule 408 contained in section (b) do not entirely inspire confidence and more important, the rule speaks only to the admissibility of evidence, not to its production in discovery. This had led to court decisions that at least some records relating to settlement discussions are relevant for discovery purposes even if not necessarily admissible. Once discovered, opposing counsel can attempt to use one of the back doors to admission provided in Rule 408. Even without using settlement documents in court, such documents can provide valuable insight into the strengths and weaknesses of an opponent's case.

These holes in the protection accorded settlement discussions have given rise to state statutes affording a privilege for mediation and/or settlement discussions as well as local rules protecting statements made during mediation. But what if a case is purely federal? And what if the mediation is in another matter, not the one in which the documents are sought? These questions have given rise to arguments that federal common law, "in light of reason and experience," should recognize a mediation/settlement privilege.

In Jaffee v. Redmond, 518 U.S. 1 (1996), a case in which the Supreme Court recognized the psychotherapist privilege under FRE 501, the Court reasoned that the desirable goals to be fostered by a proposed privilege must be tempered by the general rule that justice requires the testimony of everyone with information to offer. As Justice Scalia pointed out in his lengthy dissent, there is a cost to creating a new privilege - occasional injustice because an important truth may not be discovered. For this reason, courts are reluctant to introduce new privileges.

The court in Sheldone v. Penn. Tpk. Commission, 104 F. Supp. 2d 511 (W.D. Pa. 2000), which recognized the federal mediation privilege, succinctly summarized the Jaffee standards for creation of a new privilege:

The four relevant factors are:

  1. whether the asserted privilege is "rooted in the imperative need for confidence and trust";
  2. whether the privilege would serve public ends;
  3. whether the evidentiary detriment caused by an exercise of the privilege is modest; and
  4. whether denial of the federal privilege would frustrate a parallel privilege adopted by the states.

Sheldone, 104 F. Supp. 2d at 513. The relatively small number of courts that have considered the question have generally found that trust is essential to mediation, that the expeditious and inexpensive resolution of litigation benefits the public, that there is little evidentiary detriment because if confidentiality is not guaranteed, candid information will not be produced in mediation, and, because almost every state has some sort of mediation privilege, the adoption of a federal common law mediation privilege harmonizes with state policies. In addition, the difficulty presented to the federal courts in managing their dockets without the assistance of mediation to settle cases is often noted.

Folb v. Motion Picture Industry Pension & Health Plans, 16 F. Supp. 2d 1164 (C.D. Cal. 1998), is the seminal case on the federal mediation privilege. The issue in Folb, as in Acqis, was whether documents created after a mediation were discoverable. The court recognized that if communications with a mediator were not protected, not only would parties withhold information from their mediator, but the more forthcoming party would be penalized. Indeed, litigants would be less interested in mediation if they could not be candid with the mediator. Whether exchanges between the parties themselves outside a mediation should be privileged as to third parties is a more difficult question.

What Is the Scope of the Federal Common Law Mediation Privilege?

Relying on Sheldone and particularly Folb, the court in Acqis held that once a mediator is no longer involved, the privilege is no longer applicable:

[C]ommunications to which a mediator was personally privy, communications that were directly made at a mediator's explicit behest, or communications undertaken with the specific intent to present them to a mediator for purposes of mediation are protected by the federal mediation privilege. Settlement negotiations in which a mediator is not actively and directly involved that follow a formal mediation are not protected by the mediation privilege, even when they contain information learned during the mediation or where they occurred in light of mediation, and such communications must therefore be produced barring any other applicable rules.

Folb provides the rationale for this limitation: "Any interpretation of Rule 501 must be consistent with Rule 408. To protect settlement communications not related to mediation would invade Rule 408's domain; only Congress is authorized to amend the scope of protection afforded by Rule 408. Consequently, any post-mediation communications are protected only by Rule 408's limitations on admissibility." In other words, to avoid the post-mediation pitfalls of Rule 408, the parties must continue to use the mediator to help settle the case. Not only does one of the rationales for the privilege—the need for candid admissions of weakness—go away, the privilege cannot go so far as to eliminate the risks explicitly permitted by Rule 408(b).

Practice Point

The question of whether the federal mediation privilege is useful may arise in cases in federal court involving federal claims. In a typical case, the parties can protect their non-mediation settlement discussions by agreement if there is no statutory or local rule protection. The mediation privilege issue more likely appears when some third party wishes to discover these discussions. For example, in Folb, an employee was fired for sexually harassing another employee; he sued his employer, claiming that the firing was actually due to his whistleblowing. The allegedly harassed employee also sued the employer. The fired employee sought to obtain information about the mediation with her in the hope that the employer would have, in the course of settlement discussions, denied that the alleged harasser had committed the firing offenses.

Much of the time there will be no threat that some third party will want to discover the settlement discussions. However, situations such as in Folb, in consumer product and mass tort cases, and other types of litigation that tend to spawn copycat or spinoff suits, counsel should give consideration to keeping the mediator involved in subsequent discussions. Unless there seems to be no hope for settlement, buying a little additional time from the mediator may be a good investment. In addition, a good mediator will increase the chances that the case will settle sooner rather than later. My mentor used to tell me to "never stop talking" if a case should be settled; perhaps that should be changed in some cases to "never stop talking to your mediator."